CREDIT card signatures are now dead but, if financial experts are to be believed, cash and physical credit cards are on their way out too.

Experts predict smartphones and smartwatches will take over from both traditional forms of payment in the near future, led by Australia where one in two credit card transactions are now of the tap-and-pay variety.

News_Image_File: Becoming more popular ... Using PayPal to pay for things with your smartphone. Supplied: PayPal

Juniper Research forecasts contactless smartphone payments to hit 9.9 billion by 2018, up from 3 billion worldwide this year, and one in five smartphones will be able to act as digital wallets.

The technology is already available in Australia, though banks, businesses and PayPal are paving the way individually, making it more difficult to understand.

The technology typically uses a secure computer chip, either built into the phone or a sticker on its exterior, and Near Field Communication technology that only transmits information at very close range.

Using these two elements, smartphones can be used in place of a credit card, with contactless transactions under $100 not requiring a PIN and insured by financial institutions.

MasterCard Australasia market development and innovation head Matt Barr said Australia now led the world in tap-and-pay credit card transactions, with more than 320,000 terminals now in stores, paving the way for smartphone payment technology.

“With contactless technology, every second transaction in Australia is a tapper now,” Mr Barr said.

“That’s really important because without that contactless payment technology in market, moving to mobile phone payments would be very hard.”

MasterCard currently supports smartphone payments through Commonwealth Bank and Westpac services, where secure chips inside two Samsung Galaxy handsets can be used in place of a credit card.

Other services use a sticker to add the chip to any phone.

But Mr Barr said those chips will not be needed in future, thanks to Google technology that encrypts credit card information into a phone’s operating system.

Already used in the US, Mr Barr said Google Wallet could be seen in Australia this year.

“I’d be expecting to see commercial services as soon as late this year, but certainly by early next year,” he said.

PayPal communications head Adrian Christie said the financial service provider was also embracing mobile payments, though not only using smartphone hardware.

Using the PayPal app, Australians can engage its Check In feature to pre-authorise a payment to a store.

When they reach the counter, users tell the shop assistant they’re paying with PayPal and the assistant selects their profile photo to charge their account.

Check In payments can even be made from the Samsung Galaxy Gear 2 smartwatch.

Mr Christie says 100,000 Australian merchants have signed up to accept PayPal payments, including retail chains like Mexican restaurants Guzman Y Gomez.

“With regards to adoption, it’s not if we move to a digital wallet but when,” Mr Christie said. “It seems inevitable that there are smarter ways of making payments and they will take over.”

Six ways to pay without cash or credit cards

-PayPal Check In: Using PayPal’s smartphone app, or smartwatch app, users can check into participating stores and authorise payment. At the counter, their photo is displayed and PayPal account charged.

-CommBank PayTags: The CBA has created a sticker, called a PayTag, one third the size of a credit card. After sticking it on to any Apple or Google-based smartphone and activating it, at a cost of $2.99, users can pay for goods by tapping the phone like a credit card.

-Commonwealth Bank and Samsung Galaxy S4: The CBA’s app uses this Samsung phone’s secure chip to transform it into a credit card that can be tapped against a terminal at check-out.

-Westpac and Samsung Galaxy S4 and S5: In conjunction with Westpac’s app, users of these two phones can tap them at the counter in place of a credit card.

-CUA and Google Android phones: Using any Google Android phone with NFC (Near Field Communication) and the redi2PAY app, users can pay with their phones at the counter. Compatible handsets include the Nexus 5 and 7, and handsets from HTC and Samsung.

-Coles Mobile Wallet: Available in conjunction with a Coles MasterCard, is this PayTag sticker that lets you use the hosted phone as a credit card.

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